China closer to trade war

CHINA has edged closer to a trade war with the European Union (EU) and the US, scrapping export tariffs on a range of textile products while vowing to defend its legal trading rights. The Finance Ministry said export tariffs on 81 categories of textile goods imposed since the beginning of the year would be abolished from June 1.

And in an abrupt about turn, it said a decision made on May 20 to raise export taxes on 74 textile and clothing products, many among the 81 categories, would be revoked. The move follows decisions by the US and the EU to set new curbs on imports of Chinese-made textile products after a steep surge in shipments this year since the end of the global quota system on January 1.

The US has so far slapped import quotas on seven categories of Chinese textile goods while the EU has sought formal talks with Beijing over exports of flax yarn and t-shirts, bringing it a step closer to imposing limits.

Commerce Minister Bo Xilai said China would not cave in to pressure from the EU and US. "If the EU and US disregard the important measures and policies the Chinese government has taken and decide to impose restrictive measures over Chinese textile products, then as a response ... we will also adjust our own policy," he said. Mr Bo said the moves by the EU and US were not backed by hard evidence. "In our opinion this move lacks grounding and is inaccurate," he said at a news conference, adding that the US and the EU must first prove there had been an increase in imports and then produce proof this was disrupting the market.

http://www.theaustralian.news.com.au/common/story_page/0,5744,15457600%255E1702,00.html

will turn out to be a very bad idea. At least the part where we borrow so much from China and then put tariffs on their goods.......and they retaliate. How long till they want to settle accounts? (which would bring us to our knees)

Julie

itself get in the position that we will not be able to put up a fight. They have us over a barrel.

Currently, while a trade war would cause a recession here, it would cause an utter economic collapse in China. Their system would completely collapse without our markets for their goods.

the picture?

The truth is that our economy could survive a trade war with them, but our politicians likely could not. However, their economy would completely and utterly collapse without U.S. trade and implode even further if the trade war spread to the EU as well. Such an economic collapse would probably bring down their government.

Japan is the biggest foreign holder of our bonds, with 800 billion dollars worth.

Most of our debt is held by American citizens or companies though.

Right now, the Japanese and the Chinese are not so happy with one another.

If the Chinese were to dump all their U.S. debt, and refuse to purchase more, interest rates would climb on Treasury debt. That would roll over into the general credit markets. Those with adjustable mortgages and credit card debt would suffer. Those with cash or salable securities would benefit.

Obviously, the housing market would take a hit, and more people would declare bankruptcy immediately so as to avoid the effects of the new bankruptcy law which goes into effect in October.

All this would lead to a recession, and perhaps, some shift of manufacturing away from China, at least for a while, to locations where trade disruptions are less likely.

the only market in town.

The fact is that it wouldn't. China needs our market.

:crazy:

Suits corporate america right, sowing the seeds for this war and pissing on the United States in the process.

Oc•ci•dent

Pronunciation: (ok'si-dunt),
—n.
1. the Occident,
a. the West; the countries of Europe and America.
b. See Western Hemisphere.
2. (l.c.) the west; the western regions.

idiots in this country will finally start seeing how our China policy (free trade at any and all cost) is hurting us in the long run. Maybe then we will start doing more manufacturing back here.